stern Europe is forecast to see 1.5% GDP growth in 2020 with Eastern Europe projected to see 1.9% GDP growth in 2020.
Europe, especially both Germany and France will suffer through a difficult year in 2020 economically as they both battle to grow their economies.
The recent UK election would point to increased public and private capital spending in 2020 and beyond. The UK construction market is set to challenge Germany as the largest construction market in Europe in the next couple of years. UK Prime Minister Boris Johnson won with a comfortable majority for his Conservative Party, his rallying election cry was “Get Brexit Done” he is planning on getting through the UK parliament on or before his January 31, 2020 deadline. Economic and construction related growth is set to take off from 1.2% in the 4th of Q 2019 to a healthy rate of possibly 2.5% to 2.8% towards the 4th Q of 2020, once the final Brexit agreement is completed.
For the most part, the European Union construction market will remain flat for the next two to three years. A declining population, high unemployment and limited infrastructure capital spending will be the root cause of this situation.
The Western European construction market is an enigma as we move into 2020. The UK looks to have the best prospects for growth. Other countries that are forecast to see positive growth as it relates to construction activity include Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Ireland, Latvia, Lithuania, Romania, Slovakia, Slovenia & the Ukraine. All of these countries are projected to experience GDP growth of between 2% & 3.5% in 2020.
Poland is performing remarkably well with a current GDP of between 4.1% & 4.3%, inflation is currently forecast to be in the 2.6% to 2.9% range. Poland’s unemployment rate currently stands at 4.9%. 2020 should be a good year for Poland’s construction sector.
The countries that are projected to see minimal or no growth as it relates to construction activity include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherland’s, Norway, Portugal, Spain, Sweden & Switzerland. All of these countries are projected to experience GDP growth less than 1.7% in 2020.
Construction activity is showing signs of a slowdown in most of the major Western European economies, both Germany & France continue to experience slowdowns in their construction markets. The German economy is not performing well. Brexit could be a problem to German industry & the possibility of future US tariffs on German imported automobiles are issues that are suppressing future construction growth.
German inflation rate is forecast to be 1.0% to 1.4% in the 1st Q of 2020. The German GDP continues to be very low at 0.4% to 0.7% going into 2020. The German overall industry unemployment rate is forecast to be 3.2%, the construction industry is somewhat higher ranging between 5.2% & 5.6%. Germany is planning to de-commission a number of coal & nuclear power plants in the next 10 years, look for an increase in wind, solar & gas fire power facilities to take the place of these de-commissioned facilities.
France donors have promised more than 1 billion euros to repair / rebuild Notre Dame Cathedral that was badly damaged by fire in mid-April, the repair effort could take (7) years. France continues to have “yellow vest” protests in Paris & many cities around the country, these protests have been going on for the last nine months & look like they will continue into 2020. These protests, of course, are impacting the overall French economy. French inflation rate is forecast to be 1.0% to 1.3% going into 2020. The French GDP continues to be extremely low at 1.3% to 1.5% for the 1st Q of 2020. France’s overall industry unemployment rate is forecast to be 8.5% in 2020, the construction industry is somewhat higher ranging between 10% & 12%. The construction sector continues to experience minimal growth; there are number of major infrastructure / transportation projects in the pipeline, but nothing to get excited about.
The Irish construction sector is seeing increased activity going into the 1st Q of 2020, what Brexit will do to the Irish economy is anyone’s guess at this time.
Future construction confidence still flourishes for the most part in Eastern Europe. Countries that are expected to see positive GDP growth between 3% and 5% include Hungary, Bulgaria, and Romania. Countries that will see limited growth, i.e. GDP growth of less than 2% include Croatia, Turkey and the Slovak Republic in 2020.